Chapter 9
Managerial Decision Making
True/False Questions
1.
Decision making is easy, given that everybody makes decisions everyday.
Answer: False
2.
Level: 1
Page: 302
Type: F
Level: 2
Page: 303
Type: F
Level: 2
Page: 303
Type: A
Level: 3
Page: 303
Type: A
In 1999, WorldCom, a telecommunications company, decided to buy Skytel. This would
be considered a programmed decision.
Answer: False
8.
Type: F
Gary’s Groceries and Mike’s Market decided to merge their operations. This would be
considered a nonprogrammed decision.
Answer: True
7.
Page: 302
Two employees in Jessie’s department quit. She is faced with the decision to fill these
positions. This would be considered a nonprogrammed decision.
Answer: False
6.
Level: 1
Programmed decisions are decisions that are made for situations that have occurred often
in the past and allow decision rules to be developed to guide future decisions.
Answer: True
5.
Type: F
A choice made from available alternatives is called a decision.
Answer: True
4.
Page: 302
Decision-making must not be done amid ever-changing factors, unclear information, and
conflicting points of view.
Answer: False
3.
Level: 1
Level: 2
Page: 303
Type: F
Programmed and structured are the two classifications of management decisions.
Answer: False
Level: 1
Page: 303
Type: F
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9.
Uncertainty means that a decision has clear-cut goals, and that good information is
available, but the future outcomes associated with each alternative are subject to chance.
Answer: False
10.
Type: F
Level: 1
Page: 305
Type: F
Level: 1
Page: 306
Type: F
Level: 2
Page: 306
Type: F
Level: 2
Page: 307
Type: F
Level: 2
Page: 308
Type: F
Satisficing behavior occurs when we choose the first solution alternative that satisfies
minimal decision criteria regardless of whether better solutions are expected to exist.
Answer: True
18.
Page: 305
Normative decision theory recognizes that managers have only limited time and cognitive
ability and therefore their decisions are characterized by bounded rationality.
Answer: False
17.
Level: 2
The political model represents an "ideal" model of decision making that is often
unattainable by real people in real organizations.
Answer: False
16.
Type: F
Normative means it defines how a decision maker should make decisions.
Answer: True
15.
Page: 305
The classical decision making model assumes that the decision-maker is rational, and
makes the optimal decision each time.
Answer: True
14.
Level: 2
Ambiguity refers to a situation where the goals to be achieved or the problem to be solved
is unclear, alternatives are difficult to define, and information about outcome is
unavailable.
Answer: True
13.
Type: F
Uncertainty is by far the most difficult decision situation.
Answer: False
12.
Page: 304
The main difference between risk and uncertainty is that with risk you know the
probabilities of the outcomes.
Answer: True
11.
Level: 2
Level: 1
Page: 308
Type: F
Intuition is a quick apprehension of a decision situation based on past experience but
without conscious thought.
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Test Bank * Page 242
Answer: True
19.
Level: 1
Page: 310
Type: F
Level: 2
Page: 310
Type: F
Level: 2
Page: 311
Type: F
Level: 2
Page: 311
Type: F
Level: 2
Page: 312
Type: F
Level: 1
Page: 314
Type: F
Feedback provides decision-makers with information that can precipitate a new decision
cycle.
Answer: True
28.
Type: F
Risk propensity refers to the willingness to undertake risk with the opportunity of gaining
an increased payoff.
Answer: True
27.
Page: 309
Once the problem or opportunity has been recognized and analyzed, the decision-maker
should implement the alternative.
Answer: False
26.
Level: 2
Managers confront a decision requirement in the form of either a problem or an
opportunity.
Answer: True
25.
Type: F
Nonprogrammed decisions require six steps, however, programmed decisions being
structured and well understood requires only one step.
Answer: False
24.
Page: 309
The administrative model closely resembles the real environment in which most
managers and decision makers operate.
Answer: False
23.
Level: 2
Coalition building is the process of forming alliances among managers.
Answer: True
22.
Type: F
Cognitive scientist Gary Klein has found that intuition begins with goals.
Answer: False
21.
Page: 309
The administrative model is considered to be normative.
Answer: False
20.
Level: 1
Level: 2
Page: 315
Type: F
People who prefer simple, clear-cut solutions to problems use the directive style.
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Answer: True
29.
Level: 2
Page: 319
Type: F
Level: 1
Page: 319
Type: F
Level: 2
Page: 322
Type: F
Level: 2
Page: 324
Type: F
Managers might block or distort negative information because they don’t want to be
responsible for a bad decision.
Answer: True
35.
Type: F
By making mistakes, people go through the process of decision learning, which means
that they gain valuable experience and knowledge to perform more effectively in the
future.
Answer: True
34.
Page: 318
The rapid pace of today’s business environment requires only top management to make
decisions and have the information, skills, and freedom they need to respond immediately
to problems and questions.
Answer: False
33.
Level: 1
The Vroom-Jago model helps leaders to determine the best level of group involvement in
the decision process, with five styles ranging from Decide through Delegate.
Answer: True
32.
Type: F
The Vroom-Jago model helps a manager gauge the appropriate amount of participation by
decision makers in making a specific decision.
Answer: False
31.
Page: 318
The behavioral style is often adopted by managers who like to consider complex solutions
based on as much data as they can gather.
Answer: False
30.
Level: 1
Level: 2
Page: 324
Type: F
Devil's advocate technique is similar to brainstorming in that both techniques prevent
individuals from challenging other group member's assumptions.
Answer: False
Level: 2
Page: 325
Type: F
Multiple Choice Questions
1.
Managers are often referred to as
Chapter Nine * Managerial Decision Making
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a.
b.
c.
d.
e.
decision makers.
peace makers.
conflict creators.
unnecessary layer of employees.
profit suppressor.
Answer: a
2.
Type: F
Decision
Plan
Goal
Tactic
Strategy
Answer: a
Level: 1
Page: 302
Type: F
Choosing between a differentiation strategy and an overall cost leadership strategy is an
example of
a.
b.
c.
d.
e.
a plan.
an objective.
an alternative.
a decision.
a strategy.
Answer: d
4.
Page: 302
is a choice made from available alternatives.
a.
b.
c.
d.
e.
3.
Level: 1
Level: 2
Page: 302
Type: F
Tyke, a production manager at Kristal’s Kites, recently chose to schedule his workers to
work overtime. His alternative was to hire more workers. He is now monitoring the
consequences of his choice. This is an example of
a.
b.
c.
d.
e.
planning.
decision-making.
organizing.
controlling.
leading.
Answer: b
5.
Level: 2
Page: 302
Type: A
refers to the process of identifying problems and then resolving them.
a.
b.
c.
Organizing
Controlling
Decision-making
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d.
e.
Planning
Leading
Answer: c
6.
Level: 1
Page: 303
Programmed decisions are made in response to
a.
b.
c.
d.
e.
Type: F
organizational problems.
unusual
recurring
significant
minor
unique
Answer: b
Level: 2
Page: 303
Type: F
Bierderlack has a policy that states that more than three absences in a six-month period
shall result in a suspension. Erin, the manager, has just decided to suspend one of her
shift employees for violating this policy. This is an example of
a.
b.
c.
d.
e.
a programmed decision.
a nonprogrammed decision.
an insignificant decision.
poor management.
personal grudge.
Answer: a
9.
Type: F
Nonprogrammed
Unique
Programmed
Ill-structured
Novel
Answer: c
8.
Page: 302
Which of these decisions are associated with decision rules?
a.
b.
c.
d.
e.
7.
Level: 1
Level: 2
Page: 303
Type: A
Nonprogrammed decisions are made in response to situations that are
a.
b.
c.
d.
e.
unique.
unstructured.
important to the organization.
all of the above.
a and c only.
Answer: d
Level: 1
Page: 303
Type: F
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10.
Examples of nonprogrammed decisions would include the decision to
a.
b.
c.
d.
e.
reorder supplies.
develop a new product or service.
perform routine maintenance on one of the machines in manufacturing.
terminate an employee for violation of company rules.
fill a position.
Answer: b
11.
Good examples of
a.
b.
c.
d.
e.
decisions are strategic decisions.
Level: 2
Page: 303
Type: F
programmed decision.
nonprogrammed decision.
novel decision.
poor management.
unstructured decision.
Answer: a
Level: 2
Page: 303
Type: A
When a small community hospital decides to add a radiation therapy unit, it is considered
as a
a.
b.
c.
d.
e.
programmed decision.
structured decision.
nonprogrammed decision.
poor management decision.
certainty decision.
Answer: c
14.
Type: F
Nordstrom Department store’s "No questions asked - Return's Policy" is an example of
a(n)
a.
b.
c.
d.
e.
13.
Page: 303
nonprogrammed
programmed
insignificant
recurring
structured
Answer: a
12.
Level: 2
Level: 2
Page: 303
Type: A
If your instructor has an attendance policy, she/he is using a
a.
programmed decision.
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b.
c.
d.
e.
unique approach.
condition of ambiguity.
nonprogrammed decision.
none of the above.
Answer: a
15.
Level: 2
programmed decision.
nonprogrammed decision.
decision rule.
structured decision.
bad community decision.
Answer: b
Level: 2
Associated with the condition of
a.
b.
c.
d.
e.
Page: 303
Type: A
is the lowest possibility of failure.
ambiguity
uncertainty
certainty
risk
all of the above
Answer: c
17.
Level: 1
Page: 304
Type: F
means that all the information the decision-maker needs is fully available.
a.
b.
c.
d.
e.
Certainty
Risk
Uncertainty
Ambiguity
None of the above
Answer: a
18.
Type: A
Two area banks, Bank A and Bank B, decided to merge their operations. This is an
example of a
a.
b.
c.
d.
e.
16.
Page: 303
Under conditions of
a.
b.
c.
d.
e.
Level: 1
Page: 304
Type: F
, statistical analyses are useful.
certainty
ambiguity
risk
uncertainty
conflict
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Answer: c
19.
Level: 2
Page: 304
Type: F
means that managers know which goals they wish to achieve, but information
about alternatives and future events is incomplete.
a.
b.
b.
d.
e.
Certainty
Risk
Uncertainty
Ambiguity
Advocacy
Answer: c
Level: 2
Page: 305
Type: F
Kent, a product manager, wants to increase the market share of his product. He is unsure
about how to go about it, not knowing for sure how costs, price, the competition, and the
quality of his product will interact to influence market share. Kent is operating under a
condition of
a.
b.
c.
d.
e.
risk.
ambiguity.
certainty.
uncertainty.
brainstorming.
Answer: d
22.
Type: F
Certainty
Risk
Uncertainty
Ambiguity
Brainstorming
Answer: b
21.
Page: 304
means that a decision has clear-cut goals and that good information is
available, but the future outcomes associated with each alternative are subject to chance.
a.
b.
c.
d.
e.
20.
Level: 2
Level: 2
Page: 305
Type: A
When managers know which goals they wish to achieve, but information about
alternatives and future events is incomplete, the conditions of
exists.
a.
b.
c.
d.
e.
risk
uncertainty
ambiguity
certainty
problematic
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Answer: b
23.
24.
Level: 1
Page: 305
Type: F
is by far the most difficult situation for a decision-maker.
a.
b.
c.
d.
e.
Certainty
Risk
Uncertainty
Ambiguity
Brainstorming
Answer: d
Level: 2
Page: 305
Type: F
means that the goals to be achieved or the problem to be solved is unclear,
alternatives are difficult to define, and information about outcomes is unavailable.
a.
b.
c.
d.
e.
Certainty
Risk
Uncertainty
Ambiguity
Brainstorming
Answer: d
Level: 2
Page: 305
Type: F
The condition under which ambiguity occurs include
a.
b.
c.
d.
e.
alternatives are difficult to define.
objectives are well defined.
information about outcomes is readily available.
all the alternatives are known.
decisions are already made.
Answer: a
27.
Type: F
The conditions of certainty
The conditions of ambiguity
The conditions of uncertainty
The conditions of risk
All of the above
Answer: b
26.
Page: 305
Which of these has the highest possibility of failure?
a.
b.
c.
d.
e.
25.
Level: 2
Level: 2
Page: 305
Type: F
The classical model of decision making is based on
a.
philosophical
Chapter Nine * Managerial Decision Making
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assumptions.
b.
c.
d.
e.
irrational
economic
uncertainty
technological
Answer: c
28.
Level: 2
The administrative model of decision making
The garbage can model of decision making
The scientific management model of decision making
The classical model of decision making
The humanistic model of decision making
Answer: d
Level: 2
e.
Type: A
Problems are unstructured and ill defined.
The decision-maker strives for conditions of certainty.
Criteria for evaluating alternatives are unknown.
The decision-maker selects the alternatives that will minimize the economic
return to the organization.
The situation is always uncertain.
Answer: b
The
a.
b.
c.
d.
e.
Level: 3
Page: 306
Type: F
approach defines how a decision-maker should make decisions.
normative
scientific
descriptive
reflective
humanistic
Answer: a
31.
Page: 306
Which of these assumptions are included in the classical model of decision making?
a.
b.
c.
d.
30.
Type: F
Micah is a manager at the Tennis Tools. She is expected to make decisions that are in the
organization’s best economic interests. Her decisions should be based on which of the
following models?
a.
b.
c.
d.
e.
29.
Page: 306
Level: 2
Page: 306
Type: F
is the approach that defines how a decision maker should make decisions and
provides guidelines for reaching an ideal outcome for the organization.
a.
b.
c.
Administrative
Descriptive
Normative
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d.
e.
Bounded rationality
None of the above
Answer: c
32.
The
a.
b.
c.
d.
e.
Level: 2
.
administrative, programmed decisions
classical, nonprogrammed decisions
classical, programmed decisions
classical, ambiguous decisions
administrative, structured decisions
33.
Level: 3
Page: 306
Type: F
approach describes how managers actually make decisions, where as
approach defines how a decision-maker should make decisions.
a.
b.
c.
d.
e.
Normative, descriptive
Normative, classical
Descriptive, normative
Descriptive, administrative
Normative, administrative
Answer: c
Level: 2
Page: 306, 309Type: F
The
model of decision making is associated with satisficing, bounded rationality,
and uncertainty.
a.
b.
c.
d.
e.
classical
administrative
quantitative
rational
political
Answer: b
35.
Type: F
model of decision making is most valuable when applied to
Answer: c
34.
Page: 306
Level: 2
Page: 308
Type: F
The
model of decision making describes how managers actually makes
decisions in situations characterized by nonprogrammed decisions, uncertainty, and
ambiguity.
a.
b.
c.
d.
e.
normative
classical
administrative
scientific management
objective
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Answer: c
36.
The essence of
a.
b.
c.
d.
e.
Level: 1
Page: 308
Type: F
is to choose the first solution available.
bounded rationality
creativity
decision maximization
satisficing
the classical model of decision making
Answer: d
Level: 2
Page: 308
Type: F
Kari is a manager at My Size Clothing. Her job is very complex and she feels that she
does not have enough time to identify and/or process all the information she needs to
make decisions. Kari’s situation is most consistent with which of the following
concepts?
a.
b.
c.
d.
e.
Bounded rationality
The classical model of decision making
Satisficing
Brainstorming
Scientific management
Answer: a
39.
Type: F
satisficing.
bounded rationality.
classical model of decision making.
normative approach.
scientific approach.
Answer: b
38.
Page: 308
The concept that people have the time and cognitive ability to process only a limited
amount of information on which to base decisions is known as
a.
b.
c.
d.
e.
37.
Level: 1
Intuition is based on
a.
b.
c.
d.
e.
Level: 3
Page: 308
, but lacking in
Type: A
.
conscious thought, practicality
experience, applicability
a solid analysis, applicability
experience, conscious thought
thought-process, guts
Answer: d
Level: 2
Page: 309
Type: F
Chapter Nine * Managerial Decision Making
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40.
is the process of forming alliances among managers during the decision making
process.
a.
b.
c.
d.
e.
Networking
Socializing
Coalition building
Satisficing
Passing the buck
Answer: c
41.
Type: F
normative.
administrative
descriptive
classical
political
Answer: e
Level: 2
Page: 310
Type: F
All of these are basic assumptions of the political model EXCEPT
a.
b.
c.
d.
e.
organizations are made up of groups with diverse interests, goals, and values.
information is clear and complete
managers do not have the time, resources, or mental capacity to identify all
dimensions of the problem
managers engage in the push and pull of debate to decide goals and discuss
alternatives.
all of these are basic assumptions of the political model.
Answer: b
43.
Level: 2
Page: 310
Type: F
is the first step in the managerial decision making process.
a.
b.
c.
d.
e.
Evaluation and feedback
Development of alternatives
Recognition of decision requirement
Diagnosis and analysis of causes
Selection of desired alternatives
Answer: c
44.
Page: 310
The
model closely resembles the real environment in which most managers
and decision-makers operate.
a.
b.
c.
d.
e.
42.
Level: 2
Level: 1
Page: 311
Type: F
All of the following are characteristics of classical decision making model EXCEPT
Chapter Nine * Managerial Decision Making
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a.
b.
c.
d.
e.
clear-cut problems and goals.
conditions of certainty.
rational choice by individual for maximizing outcomes.
limited information about alternatives and their outcomes.
all of the above are characteristics of classical decision making model.
Answer: d
45.
Type: F
vague problem and goals.
conditions of certainty.
limited information about alternatives and their outcomes.
satisfying choice.
all of the above are characteristics of administrative decision making model.
Answer: b
46.
Level: 3
Page: 311
Type: F
is the last step in the decision making process.
a.
b.
c.
d.
e.
Evaluation and feedback
Development of alternatives
Implementation of chosen alternative
Selection of desired requirement
Recognition of decision requirement
Answer: a
Level: 1
Page: 312
Type: F
Once the desired alternative is selected, it should be
a.
b.
c.
d.
e.
analyzed.
evaluated.
implemented.
recognized.
developed.
Answer: c
48.
Page: 311
All of the following are characteristics of administrative decision making model
EXCEPT
a.
b.
c.
d.
e.
47.
Level: 3
Level: 2
Page: 312
Type: F
"When did it occur" and "how did it occur" are questions associated with which step of
the decision making process?
a.
b.
c.
Diagnosis and analysis of causes
Recognition of decision requirement
Development of alternatives
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d.
e.
Selection of desired alternative
None of the above
Answer: a
49.
Level: 2
Page: 312
Type: F
Molly works in the human resource department at Turtle Shells, Inc. She believes she is
seeing an increase in drinking problems among the workforce. She thinks she needs to
investigate further. She is at what stage of the managerial decision making process?
a.
b.
c.
d.
e.
Diagnosis and analysis of causes
Development of alternatives
Recognition of decision requirement
Evaluation and feedback
Selection of desired alternatives
Answer: c
Level: 1
The decision-maker must
a.
b.
c.
d.
e.
Page: 312
Type: A
once the problem has been recognized and analyzed.
evaluate and provide feedback
choose among alternatives
generate alternatives
prioritize the alternatives
reanalyze the problem
Answer: c
52.
Type: F
develop alternative solutions.
integrate information in novel ways.
use the classical model of decision making.
focus on generating ideas.
select undesirable alternatives.
Answer: b
51.
Page: 312
The recognition of the decision requirement step in the managerial decision making
process requires managers to
a.
b.
c.
d.
e.
50.
Level: 2
Level: 2
Page: 313
Type: F
For a programmed decision,
a.
b.
c.
d.
e.
alternatives are usually difficult to identify.
alternatives are usually easy to identify.
there are usually few alternatives.
there are usually few alternatives and they are difficult to identify.
there are no alternatives.
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Answer: b
53.
54.
Level: 2
Page: 313
Type: A
is the willingness to undertake risk with the opportunity to increase one's return.
a.
b.
c.
d.
e.
Tunnel vision
Risk propensity
Risk averse
Thrill seeking
Ineffective investment philosophy
Answer: b
Level: 1
Page: 314
Type: F
A risk taker
a.
b.
c.
d.
e.
takes many chances.
will always try to increase his/her return by choosing a riskier alternative.
will select an alternative with a low probability of success if the expected payout
is higher.
all of the above.
b and c only.
Answer: d
Level: 2
Page: 314
Type: F
The
step in the decision making process involves using managerial,
administrative, and persuasive abilities to translate the chosen alternative into action.
a.
b.
c.
d.
e.
recognition
analysis
evaluation
implementation
feedback
Answer: d
57.
Type: F
likely be making programmed decisions.
probably have an easy time generating alternatives.
probably have a difficult time generating alternatives.
likely rely on the classical model of decision making.
wait until environment becomes certain.
Answer: c
56.
Page: 313
Freddie is a manager at Monster Catchers. Monster Catchers is currently operating in an
environment of high uncertainty. As a result, Freddie will
a.
b.
c.
d.
e.
55.
Level: 2
Level: 1
Page: 314
Type: F
Feedback is important because
Chapter Nine * Managerial Decision Making
Test Bank * Page 257
a.
b.
c.
d.
e.
decision making is a continuous process.
it provides decision-makers with new information.
it helps determine if a new decision needs to be made.
all of the above.
b and c only.
Answer: d
58.
Level: 2
The generation of alternatives
Implementation of the chosen alternative
Evaluation and feedback
Recognition of the decision requirement
Selection of desired alternative
Answer: c
The
a.
b.
c.
d.
e.
Level: 2
Type: A
behavioral
conceptual
directive
analytical
classical
Level: 1
Page: 318
Type: F
Personal
style refers to differences among people with respect to how they
perceives problems and make decisions.
a.
b.
c.
d.
e.
risk taking
behavior
decision
strategic
analysis
Answer: c
61.
Page: 315
style is used by people who prefer simple, clear-cut solutions to problems.
Answer: c
60.
Type: F
Tasha is collecting data on how well the organization has done since their new strategy
was implemented. She is in what stage of the managerial decision making process?
a.
b.
c.
d.
e.
59.
Page: 315
Level: 2
Page: 318
Type: F
Managers are considered as having
style, when they like to consider complex
solutions based on as much data as they can gather.
a.
b.
behavioral
conceptual
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c.
d.
e.
directive
analytical
classical
Answer: d
62.
Level: 1
Page: 318
Type: F
The Vroom-Jago model
a.
b.
c.
d.
e.
helps managers determine the appropriate amount of participation for
subordinates.
helps managers implement the classical model of decision making.
is only useful in programmed decision situations.
forces managers to make decisions without participation.
helps managers avoid participation.
Answer: a
Level: 2
Page: 319
Type: F
Which of these decision styles relates to the situation where you obtain the necessary
information from your subordinates and then decide on the solution to the problem
yourself?
a.
b.
c.
d.
e.
Decide
Consult Group
Delegate
Facilitate
Consult Individually
Answer: e
65.
Type: F
Behavioral
Classical
Analytic
Logical
Conceptual
Answer: a
64.
Page: 318
Which of these styles is adopted by managers having a deep concern for others as
individuals?
a.
b.
c.
d.
e.
63.
Level: 1
Level: 2
Page: 319
Type: F
Which of these is a highly autocratic decision style?
a.
b.
c.
d.
Consult Group
Consult Individually
Facilitate
Decide
Chapter Nine * Managerial Decision Making
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e.
Delegate
Answer: d
66.
Level: 1
Page: 319
Type: F
Josh is a manager at Baseball Equipment. He is thinking about involving his
subordinates in the decision making process. According to Vroom and Jago, if
a.
b.
c.
d.
e.
his subordinates typically go along with whatever Josh decides, their involvement
is not that important.
Josh does not have good information; there is no need to involve the subordinates.
the subordinates do not share in the goals of the organization, Josh should let them
make the decision alone.
the problem is ambiguous and poorly structured, there is a need for Josh to
interact with his subordinates.
None of the above applies.
Answer: d
Level: 3
Page: 320
Managers can use the Vroom-Jago model to make
a.
b.
c.
d.
e.
Type: A
decisions.
timely, unimportant
low-quality
problematic
timely, high-quality
only time unrestricted
Answer: d
69.
Type: F
Consult Group
Consult Individually
Facilitate
Decide
Delegate
Answer: e
68.
Page: 319
Which of these decision styles represent a group decision making?
a.
b.
c.
d.
e.
67.
Level: 2
Level: 2
Page: 321
Type: F
The tendency of organizations to invest time and money in a solution despite strong
evidence that is not appropriate is referred to as
a.
b.
c.
d.
e.
technological decisions.
collective intuition.
decision learning.
team delay.
escalating commitment.
Chapter Nine * Managerial Decision Making
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Answer: e
70.
Level: 2
Page: 325
Type: F
The
is the individual who is assigned the role of challenging assumptions made
by the group.
a.
b.
c.
d.
e.
group gadfly
multiple advocate
devil's advocate
brainstormer
inferior member
Answer: c
Level: 1
Page: 325
Type: F
Scenario Questions
Scenario—Brandon Folk
Brandon Folk manages a group of eight electrical engineers at Athex Designs. His team is highly
trained and well respected by experts both inside and outside the company. Recently one of
Brandon’s engineers suggested a new technique for the development and use of an argon laser.
There appeared to be rich potential for this technology, but Brandon wasn't certain that
developing this technology was the best use of his limited resources. Brandon was facing a
significant decision.
1.
If Brandon uses the classical model of decision making, which of these assumptions
would he reject?
a.
b.
c.
d.
e.
The decision maker is rational and uses logic in assigning values and evaluating
alternatives.
The desired decision will maximize attainment of organizational objectives.
The decision-maker strives for complete certainty, gathering complete
information.
Problems are precisely formulated and defined.
All of the above are accepted.
Answer: e
2.
Type: A
If Brandon uses the administrative model of decision making, which of these assumptions
would he reject?
a.
b.
Decision-makers settle for a satisficing rather than maximizing solution
The search for alternatives is limited because of information, human and resource
Chapter Nine * Managerial Decision Making
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c.
d.
e.
constraints
Rational procedures will normally lead to the best solution in a complex
organization
Decision objectives are often vague, conflicting, and lack consensus among
managers
All of the above are accepted
Answer: c
3.
Type: A
Which of the following steps would Brandon not take in making his decision?
a.
b.
c.
d.
e.
Sense and recognize the decision requirement
Implement the chosen alternative
Create a set of alternatives
Diagnose and analyze problem causes
All of the above would be included
Answer: e
Type: A
Short-Answer Questions
1.
A(n)
is a choice made from available alternatives.
Answer: decision
2.
Page: 302
is the process of identifying problems and opportunities and then
resolving them.
Answer: Decision making
3.
decisions involve situations that have occurred often enough to enable decision
rules to be developed and applied in the future.
Answer: Programmed
4.
Page: 303
decisions are made in response to situations that are unique, are poorly
defined and largely unstructured, and have important consequences for the organization.
Answer: Nonprogrammed
5.
Page: 302
Page: 303
means that all the information the decision-maker needs is fully available.
Answer: Certainty
Page: 304
Chapter Nine * Managerial Decision Making
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6.
means that a decision has clear-cut goals and that good information is available,
but the future outcomes associated with each alternative are subject to chance.
Answer: Risk
7.
Page: 304
Under conditions of
, managers know what goal they wish to achieve, but
information about alternatives and future events is incomplete.
Answer: uncertainty
8.
Page: 305
means that the goals to be achieved or the problem to be solved is unclear,
alternatives are difficult to define, and information about outcomes is unavailable.
Answer: Ambiguity
9.
The
Page: 305
model of decision making is based on economic assumptions.
Answer: classical
10.
Page: 306
A normative decision making model defines how a manager
Answer: should
11.
Page: 306
In many respects, the
model represents an “ideal” model decision-making and
can’t usually be attained by real people in real organizations.
Answer: classical
12.
Page: 307
The
model of decision making describes how managers actually make
decisions in difficult situations, such as those characterized by nonprogrammed decision,
uncertainty, and ambiguity.
Answer: administrative
13.
Page: 308
means that decision-makers choose the first solution alternative that satisfies
minimal decision criteria.
Answer: Satisficing
15.
Page: 308
The recognition that people have limits on how rational they can be is known as
Answer: bounded rationality
14.
make decisions.
Page: 308
represents a quick apprehension of a decision situation based on past experience
but without conscious thought.
Chapter Nine * Managerial Decision Making
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.
Answer: Intuition
16.
A(n)
should.
Page: 309
approach describes how managers actually make decisions, not how they
Answer: descriptive
17.
Page: 309
Gary Klein, a cognitive psychologist, has found that intuition begins with
Answer: recognition
18.
Page: 309
is the process of forming alliances among managers.
Answer: Coalition building
19.
.
A(n)
occurs when organizational accomplishment is less than established goals.
Answer: problem
20.
Page: 310
Page: 311
exists when managers see potential of enhancing performance beyond current
levels.
Answer: Opportunity
21.
Page: 311
The step in the decision making process in which managers analyze the underlying causal
factors associated with the situation is called
.
Answer: diagnosis
22.
Page: 312
List four of the eight questions Kepner and Tregoe recommend that managers ask when
diagnosing and analyzing causes.
Answer: Students can answer with any four of the following questions: (1) What is the
state of disequilibrium affecting us? (2) When did it occur? (3) Where did it occur? (4)
How did it occur? (5) To whom did it occur? (6) What is the urgency of the problem? (7)
What is the interconnectedness of events? (8) What result came from which activity?
Page: 312-313
23.
is the willingness to undertake risk with the opportunity of gaining an increased
payoff.
Answer: Risk propensity
24.
Page: 314
The
stage involves the use of managerial, administrative, and persuasive
abilities to ensure that the chosen alternative is carried out.
Chapter Nine * Managerial Decision Making
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Answer: implementation
25.
is important because decision making is a continuous, never ending process.
Answer: Feedback
26.
Page: 315
Differences among people with respect to how they perceive problems and make
decisions is called
.
Answer: decision style
27.
Page: 318
The
style is often the style adopted by managers having a deep concern for
others as individuals.
Answer: behavioral
28.
Page: 318
The
helps a manager gauge the appropriate amount of participation by
subordinates in making a specific decision.
Answer: Vroom-Jago Model
29.
Page: 314
Page: 319
List the five guidelines of effective decision-making in today’s businesses.
Answer: Start with brainstorming, Learn, don’t punish, Know when to bail, Practice the
five whys, Engage in rigorous debate
Page: 322
30.
A(n)
the group.
is assigned the role of challenging the assumptions and assertions made by
Answer: devil's advocate
Page: 325
Essay Questions
1.
Explain the difference between programmed and nonprogrammed decisions and give an
example of each.
ANSWER:
Programmed decisions involve situations that have occurred enough to enable decision
rules to be developed and applied in the future. Examples include job skills required to
fill certain positions, the reorder point for manufacturing inventory, and selection of
Chapter Nine * Managerial Decision Making
Test Bank * Page 265
freight routes for product deliveries.
Nonprogrammed decisions are made in response to situations that are unique, are poorly
defined and largely unstructured, and have important consequences for the organization.
Examples are decisions to build a new factory, develop a new product or service, and
enter a new geographical market.
Level: 2
2.
Page: 303
Compare decision conditions of certainty, risk, uncertainty, and ambiguity.
ANSWER:
Decisions made under the condition of certainty have a high possibility of success. All of
the information that the decision-maker needs is available. The decision-maker knows
the alternatives, the objectives, and the outcomes. Risk is a situation where the decisionmaker knows the alternatives and the objectives. However, the outcomes are not known
with certainty, but the probabilities of the outcomes are known. Under conditions of
uncertainty, the decision-maker does not know the probabilities of the outcomes, while
she knows some of the alternatives and the objectives. With ambiguity, the objectives
are unclear, alternatives are difficult to define, and information about outcomes is
incomplete or unavailable.
Level: 3
3.
Page: 303-306
Briefly describe the assumptions underlying the classical model of decision making.
ANSWER:
The classical model of decision making is based on four assumptions. First, the decisionmaker attempts to accomplish goals that are known and agreed upon. In addition,
problems are specified and defined precisely. Second, the decision-maker attempts to
gather complete information, going for a condition of certainty. Third, the criteria for
evaluating the alternatives are known and the decision-maker will select the alternative
that maximizes the economic return to the organization. Fourth, the decision-maker is
rational and relies upon logic to make sense of the information available.
Level: 3
4.
Page: 306
Explain the four underlying assumptions of the administrative model.
ANSWER:
(1) The decision maker operates to accomplish goals that are vague and conflicting. (2)
All alternatives and the potential results are based on simplistic views of organizational
events. (3) Alternatives are limited based on human constraints. (4) Managers settle for
satisficing.
Chapter Nine * Managerial Decision Making
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Level: 2
5.
Page: 306
List and describe the four basic assumptions of the political model.
ANSWER:
(1) Organizations are made up of groups with diverse interests, goals, and values.
Managers disagree about problem priorities and may not understand or share the goals
and interests of other managers. (2) Information is ambiguous and incomplete. The
attempt to be rational is limited by the complexity of many problems as well as personal
and organizational constraints. (3) Managers do not have the time, resources, or mental
capacity to identify all dimensions of the problem and process all relevant information.
Managers talk to each other and exchange viewpoints to gather information and reduce
ambiguity. (4) Managers engage in the push and pull of debate to decide goals and
discuss alternatives. Decisions are the result of bargaining and discussion among
coalition members.
Level: 2
6.
Page: 310
What are the six steps in the managerial decision making process?
ANSWER:
The six steps are (1) recognize the decision requirement; (2) diagnose and analyze the
causes; (3) develop alternatives; (4) select the desired alternative; (5) implement the
chosen alternative; and (6) evaluate and determine feedback.
Level: 1
7.
Page: 312
Explain how a manager selects the desired decision in the managerial decision making
process.
ANSWER:
The manager tries to select the choice with the least amount of risk and uncertainty.
Because some risk is inherent for most nonprogrammed decisions, managers try to gauge
prospects for success. Under conditions of uncertainty, they might have to rely on their
intuition and experience to estimate whether a given course of action is likely to succeed.
Basing choices on overall goals and values can also effectively guide selection of
alternatives. Decision about how to cope should be selected by relying on the company’s
values and goals of treatment of employees and building long-term relationships. Making
choices depends on managers’ personality factors and willingness to accept risk and
uncertainty.
Level: 2
Page: 313-314
Chapter Nine * Managerial Decision Making
Test Bank * Page 267
8.
Briefly describe the four major personal decision styles.
ANSWER:
Directive, analytical, conceptual, and behavioral style.
Level: 2
9.
Page: 318
Describe the five leader decision styles identified by Vroom and Jago.
ANSWER:
The five styles range from highly autocratic to highly democratic. In using the first
decision style, (Decide), leaders would make the decisions on their own using the
information they had available to them at the time. The second style, (Consult
Individually), involves leaders gathering information from their subordinates and then
going on to make the decision on their own. Consult Group is the third decision style. It
goes beyond Consult Group by involving the subordinates to a greater extent: the leader
asks them individually for their ideas and solutions, but still makes the decision. The
fourth style, (Facilitate), is similar to Consult Group, except that the leader gathers the
subordinates together as a group to solicit information. The most democratic style,
(Delegate), is based on the leaders gathering their subordinates together as a group,
sharing the problem with them, asking for their ideas but not trying to influence them, and
accepting whatever solution has the support of the group.
Level: 2
Page: 320
Chapter Nine * Managerial Decision Making
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